Summary:
- Bangladesh urgently seeks full power restoration from Adani’s 1,600 MW Jharkhand plant after months of halved supply due to payment delays and foreign currency shortages.
- A technical glitch delayed restarting the second unit this week, with Bangladesh paying $85 million monthly against disputed dues ($650M vs. Adani’s $900M claim).
- A court-ordered review of the 2017 contract’s coal-indexed pricing (55% costlier than average imports) may lead to renegotiations amid tax benefit disputes.
- Virtual talks on Feb 11 aim to resolve financial and operational issues, as Adani faces unrelated U.S. bribery charges denied by the company.
Bangladesh has requested Adani Power to fully restore electricity supplies from its 1,600-megawatt thermal plant in India’s Jharkhand state, following months of reduced output linked to payment disputes and technical setbacks. The state-run Bangladesh Power Development Board (BPDB) confirmed efforts to clear outstanding dues through monthly payments of $85 million while addressing operational challenges delaying the plant’s second unit from restarting this week.
The Adani-owned facility, operating at 42% capacity since November 2023, halved supplies due to payment delays exacerbated by Bangladesh’s foreign currency shortages. A planned full resumption on February 10 was postponed after technical issues caused high vibrations in one unit, according to BPDB Chairperson Md. Rezaul Karim, who stated: “We are trying to pay more, and our intention is to reduce the overdue. Now there is no big issue with Adani.”
Key developments include:
- Payment disputes: Adani claims $900 million in unpaid bills, while Bangladesh estimates arrears at $650 million, with tariffs 55% higher than average Indian power imports.
- Contract scrutiny: A Bangladesh court is reviewing the 25-year agreement’s pricing formula, which ties tariffs to coal indexes, potentially enabling renegotiations.
- Diplomatic context: The $2 billion plant, part of a 2017 deal signed under former Prime Minister Sheikh Hasina, faces scrutiny from Bangladesh’s interim government over alleged tax benefit discrepancies.
Virtual talks between Adani and BPDB officials are scheduled for February 11 to resolve operational and financial disagreements. The discussions follow U.S. prosecutors indicting Adani Group founder Gautam Adani in November 2024 over a separate $265 million bribery allegation, which the company denies.
Bangladesh’s energy security hinges on resolving the impasse, as the Adani plant supplies 7-8% of its electricity demand. With Dhaka seeking to stabilize power supplies amid economic strain, the outcome of ongoing technical evaluations and payment negotiations will critically impact its energy strategy.
